NZSALES JUNE 2011 / Issue 51
Price
Increases
7 Tips You Must Read
Leading the Sales Culture The Impersonal Electronic Age Clean Sheets!
Plus! Check inside to see if you've won cool prizes from our awesome new supporters! NZ’s e-mag for sales leaders
CONTENTS JUNE / Issue 51 6
10
6
THIS WEEK'S MUST READ PRICE INCREASES 7 Tips you must read.
10
LEADING THE SALES CULTURE Management must lead the change
12
Quick Fix It’s not what you sell, it’s how you sell.
14
TWO MINUTE TOP-UP The impersonal electronic age Are you getting noticed
14
16
RESOURCE CORNER The Ultimate Sales Machine: Turbocharge Your Business with Relentless Focus on 12 Key Strategies
17
NZSM CALENDAR
18
MARKETPLACE
20
SALES SUPPORT WINNERS
21
THE CLOSE
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From the Editor
ABOUT / Short and sharp, New Zealand Sales Manager is a free e-magazine delivering thought provoking and
T
he must read article by Mark Hunter in this issue really caught my attention when I read it. Implementing price increases in
enlightening articles, and industry news and information to forwardthinking sales managers, business
a competitive market is never easy, and I done
owners and sales professionals.
some pretty tough ones over the years. I have
EDITOR / Paul Newsom
also experienced many poorly executed attempts
ART DIRECTOR / Jodi Olsson
to increase prices. Saying nothing and hoping nobody notices, and small notes on the bottom of a monthly invoice, are some of the worst practises that I have seen. Understanding your customer and the impact of a price increase on their business is vital before you
GROUP EDITOR / Trudi Caffell CONTENT ENQUIRIES / Phone Paul on 04 586 4733 or email pauln@nzsalesmanager.co.nz ADVERTISING ENQUIRIES / Phone Richard on 09 522 7257 or
begin to communicate the news of the increase. The
email richardl@espiremedia.com
advice and tips that Mark gives are essential reading
ADDRESS / NZ Sales Manager, C/-
and if this is not current practise in your business, I
Espire Media, PO Box 137162, Parnell,
suggest you have some work to do!
Auckland 1151, New Zealand WEBSITE / www.nzsalesmanager.co.nz
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Price
Increases 7 tips you must read
By Mark Hunter
E
ven the most sales savvy among us has had to fight back the nerves that materialise whenever we are faced with telling a customer about a price increase. Talking about it never makes for an easy conversation. When discussing a price increase in a business-tobusiness environment, it is important to remember that our customers have probably had to have the same discussion with their own customers. A company exists only as long as it earns a profit, and it can only do that if it delivers a quality product or service at the right price. This means that the key to any conversation about raising the price is to emphasize that such an increase will ensure product quality.
NZSM / JUNE 2011 / 6
As you begin to prepare your strategy for communicating a price increase, ask yourself the following questions: 1. Does the customer take your product/service and add a standard percentage increase in price when selling to their customers? If this is the case, you can point out that your customer will make more money by taking a standard percentage of a higher amount. 2. What percentage of the customer’s business is your product/service? If the percentage is small, tell them that the amount of increase is only a small percentage of their total business. If the percentage is great, then you can emphasize that the price increase is necessary to maintain the level of product quality necessary for them to serve their customers. 3. Has the customer faced any other price increases from other vendors? If so, try to identify what some percentages of the other increases have
been. If yours falls into the low end, then you can point out how your increase is comparatively smaller than that of many others. If your increase is at the high end, you can either explain how yours is the only one you expect to take or that you wouldn’t be surprised to see others coming back to take another round of price increases. 4. How does the customer view you and the products/services you sell? If you have a quality reputation and record, then you can emphasize that the increase has been carefully thought through and it is only being taken to ensure continued quality. If you have a spotty record with the customer, then you should stress how the price increase will allow you to begin addressing some of the issues in question by allowing you to improve the overall quality of service they have been receiving. Naturally, it is important to make sure all comments are backed with a commitment to follow-through.
When discussing a price increase in a business-to-business environment, it is important to remember that our customers have probably had to have the same discussion with their own customers
5. Will the customer raise an issue with the price increase? Be prepared to show documentation of how your costs have escalated and how other companies are experiencing the same increases. (An example is the increasing cost of oil, which has forced any company that uses petroleum in the manufacturing or transportation of goods to most likely increase prices.) When having this discussion, be sure to show empathy for the customer, but remain firm in what you’re saying. If the customer senses any hesitation on your part, they will likely try to exploit it in the form of a price concession from you. Also, be prepared to share steps that your company has taken in an attempt to avoid a price increase. 6. This can include ways you’ve already cut costs or how the price increase is the only way to maintain the quality and service the customer expects. A final point to emphasize is the time lag between this price increase and the previous increase. Having information available concerning
the rate of inflation during that specific time period may also help diffuse the issue. 7. Why does the customer buy from you anyway? Knowing this will allow you to reinforce these points when talking about the price increase. You should also have ready at least two key needs of the customer that your product or service satisfies. Be sure all of your strategic information about the customer is up-to-date before a price increase is announced. 8. How much business is at risk from the customer? We can sometimes get carried away thinking that if we raise prices, we’ll lose the customer, even though this is rarely the case. Think through what steps the customer would have to take to move to another vendor. Many times the work involved in moving is not worth the effort, and thus the business is less at risk than thought.
7 / JUNE 2011 / NZSM
The following sales presentation tips are the best practices to employ when executing a price increase: • Give the customer lead-time. Provide the customer with enough notice to allow them to make adjustments in their information systems and to exercise at least one more order at the existing price. •
Avoid showing favourites. Pricing integrity is always essential, but especially so during a price change. Do not treat particular customers more favourably than others in pricing during an increase. Different pricing levels are fine as long as they can be logically defended so that a customer who is not receiving the price break can understand and accept the price change.
•
Do not allow your customer to find out about a price increase from your invoice. Any changes in pricing must come from the account executive or a person of high position within the company.
• Believe in the price increase. In order to be paid what you are worth, you must charge what you are worth. Although this is not something that can be explicitly communicated to the customer, this general sense is what sets apart the best practice companies and highperforming sales professionals. •
Instill an open-phone/open-door policy. Any time a price increase takes place, it is important for all senior executives to be willing to answer a phone call from a customer or to make phone calls to key customers. For successful consultative selling, nothing sends a stronger signal to a sales organisation than seeing their senior executives on the front-line when dealing with a price increase.
NZSM / JUNE 2011 / 8
Information regarding a price change should only appear on an invoice after every person involved has been personally notified. (Sufficient time should occur in the price increase timeline to allow at least one invoice to contain a note of the pending increase in price.) •
Make sure each customer service representative and anyone else who comes in contact with the customer is fully aware of when the price increase is going to be communicated. One of the most significant possibilities for confusion is when the customer hears conflicting information from different departments. Everyone in customer service needs to be fully aware of the price increase, the reasoning behind it, and the logistics for implementation. They should also be provided with a FAQ guide to ensure that when customers do ask them about elements of the pricing increase, they are able to share accurate information.
•
Before and after the price increase, monitor the sales patterns of your individual customers. It is important to quickly catch any changes that occur as a result of the price increase.
During the 1970s and 1980s, price increases were common and expected. In the past several years, however, we’ve all grown used to lower inflation and the overwhelming impact of Wal-Mart’s (editor: consider the Warehouse in New Zealand) philosophy on pricing. Today, price increases are again growing more common and acceptable as long as they are well thought through and not seen as a way to merely increase profits. Because they are an inevitable part of business today, we can’t let ourselves avoid dealing with price increases. Instead, we should seek to use them strategically to increase our selling potential. ■
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Leading the Sales Culture Management must lead the change By Anya Anderson
T
he days when the only people responsible for sales were those on the shop floor or travelling reps are well and truly gone. For a business to be successful in the 21st Century, everyone from the CEO down must eat and breathe sales. This is called a ‘sales culture’ and it means that everyone knows they are part of the sales process and they must all take responsibility for increasing sales by adopting a customer-focused attitude to their jobs. This customer-focused attitude is important. One of the major misconceptions about sales cultures is that they are built to increase sales at any cost to the detriment of longer range relationship building activities. But a true sales culture is focused on nurturing customers by creating the best possible experiences for them and making sure they find exactly what they are looking for. Any sales culture must start from the top. If management does not lead by example, others will not follow. It’s like telling a child how important something
NZSM / JUNE 2011 / 10
is and then doing the complete opposite yourself. For example, if a CEO visited a shop and showed more interest in how the stock was placed than sales, this could give a conflicting message. But if he or she walked up to an assistant and asked about a recent interaction the assistant had with a customer, that would show that the boss was serious about the sales culture. By seeing management lead the charge, employees will quickly recognise the need for them to follow. This is why it’s vital that any sales training a business considers is undertaken by everyone, not just the sales staff. The necessary culture change will never happen if the sales team alone are sent on some one day workshop. With everyone taking part in ongoing training, they will learn what an effective sales team does and learn more about how their own roles can become more customer-focused. While the training is focused on the sales staff, the same principles should apply to everyone in the
organisation. For example, a receptionist could go that extra mile to meet the needs of waiting visitors. New Zealand has a poor record when it comes to customer service and that’s not only the fault of those on the shop floor. If they have not received the training they need, they cannot be held accountable for a poor performance. Equally, if management are not leading by example, they would have no reason to believe that customer service was as important as it should be.
customer, far fewer complaints like this would be made and profits would rise. Systems would be put in place to prevent this happening. It’s not just telecommunications, but every industry. Customers commonly hear phrases like “We are understaffed so I can’t help you” or “As long as you wait until next week, I can get you that information.”
A Kiwi Host survey in 2009 highlighted that it’s not only the sales staff that must buy into this sales culture. It found that the number one complaint about telecommunications companies was finding the right person to fix their problem.
But companies with an effective sales culture have every person and every department thinking and acting like the sales team. They are intent on creating value, problem-solving and being customerfocused. This leads to greater productivity, an improvement in team dynamics and importantly, a reduction in complaints.
If everyone in a business was focused on the
Creating a sales culture is about doing things right
Creating a sales culture is about doing things right and finding solutions for clients and identifying future problems before they even become apparent and finding solutions for clients and identifying future problems before they even become apparent. A good New Zealand example of a business successfully introducing a sales culture is Warehouse Stationery. This is a business that has always had huge amounts of stock, but it never offered customer service. People would walk in off the street, and if they could not find what they were looking for, they would leave without assistance. Warehouse Stationery decided it wanted to increase its market share. To do this it would need to either get more customers, or get those in the stores to buy more. It decided a change in sales culture was needed to achieve its goals. Everyone in the team then got access to sales training and the company set about changing its culture. It was aware it would take time for customers to see the change because they would need to visit stores a few times before they realised the new customer service policies were there to stay.
The change was led from the top. CEO Mark Powell would even ring sales people personally and congratulate them on their successes and looked at stores where things were not going so well. Word soon got around that management was serious about the change, so the whole team followed suit. This has all led to a significant increase in Warehouse Stationery’s bottom line. The need for a sales culture shift among the majority of New Zealand businesses cannot be over-emphasised. It never ceases to amaze me how so many managers don’t recognise this. They will spend many thousands of dollars on marketing to get people through their doors or aware of their products and services. While marketing is important, it is only effective if it is backed up by an effective sales culture. It’s one thing to get people through the doors, but it’s quite another to give them the best possible experience, make sales and retain their loyalty. Without having the entire staff focused on this, all the marketing in the world will be ineffective. ■
11 / JUNE 2011 / NZSM
QUICK FIX
Quick Fix
It's Not What You Sell, It's How You Sell
CLEAN SHEETS
M
ake sure you start each client meeting with a clean page in your notebook. If you are using the same page from your last two meetings, full of notes and scribbles, this will send a message to the client that you are cluttered, and that your attention is still in other places.
The clean sheet shows the client that the only thing on your agenda is the meeting with them. It will also keep your mind on the client and the conversation without the distraction of previous notes in front of you. ■
The Rev Sales Network invites you to join us for
Auckland Rev-Up #3 Tuesday 19th July 2011 Guest Speaker Linda Coles RSN Rev-Up Series AUCKLAND 2011
The Topic "Digital Networking– Prospecting in the 21st Century”
With thanks to
Linda founded Blue Banana to train other professionals in the expert use of social media tools as a viable strategy to grow their brand or company online and develop an additional way of doing business. Linda has helped many companies and businesspeople in New Zealand to gain a competitive advantage in their industries through inventive use of social media. Find out how to use digital networking to prospect outside the box.
Linkedin • • • • • • •
Is LinkedIn the new “Wine and Cheese evening”? What is it, who’s using it? Why is it important to have a presence? How do I utilise the tools to prospect? Do’s and Don’ts? What benefits can I get? What do I do with my connections?
Digital Networking and Prospecting in the 21st Century find out how...
The Presenter Linda has worked with professionals at major New Zealand companies including Wolters Kluwer, Telecom, ICONZ, Bayleys Real Estate, EBOS, and University of Auckland Business School. She has presented to Microsoft, the Her Business Network, MIT, Results.com, HRINZ, William Buck and staff of the University of Auckland. Linda's work has been published by the NZ Herald, NZ Business Magazine, Her Business Magazine, Human Resources Magazine, Social Media Examiner, Start Up magazine and she is the resident social media expert for www.businesswomen.co.nz
The Details RSN Rev-Up Series 2011 Auckland Rev-Up #3 With Linda Coles 12pm—2pm, Tuesday 19th July 2011 OfficeMax Training Centre 30 Sir Woolf Fisher Drive, Highbrook, East Tamaki Auckland Rev Sales Network Members: Free Non-members: $49.95 incl gst pp Includes light lunch
How To Register To register your attendance for this event send an email with “Linda Coles” in the subject line and the number of tickets required to info@rsn.co.nz. Or for more details visit us at www.rsn.co.nz Hurry! Registrations close Friday 15 July! Spaces allocated on first reserved, first served basis. Limit 80 attendees only.
Visit us at www.rsn.co.nz
TWO MINUTE TOP UP
inda Coles of Blue Banana is a speaker and trainer on building and maintaining relationships L online. To find out more visit www.bluebanana.co.nz
The
Impersonal Electronic Age Are you getting noticed? By Linda Coles
I
f you are familiar with Dale Carnegie’s bestselling book “How to win friends and influence people”, you will know that he talks a great deal of common sense when dealing with others, but unfortunately, common sense is not that common in our very hectic, stressful and electronic age. Dale lays down very simple principles that really do work in everyday life, but I fear that in this electronic age, we have lost a good deal of them, and our lack of time in our busy, busy worlds has not helped. When was the last time you looked at how you responded to a colleagues email, looked at not only what you have written, but how it has been written? My guess is not in a long time. I also bet that you get a reasonable amount of emails and other electronic
NZSM / JUNE 2011 / 14
communication from your suppliers, vendors and others that are very keen for a slice of what you have to offer. How many of this type of communication has made you sit up and take notice? Made you want to find out more? Probably not many. The single sweetest sound we like to hear is someone mentioning our name in some way, it makes us feel important, and if you are really honest with yourself, it’s a feeling we like. I really notice if someone has started an email to me without a greeting and my name because I instantly think it is a mass mail out. Give me “Hi Linda” every time. To start a conversation online without any of the pre amble comes across as blunt and rushed, giving me the impression that I am unimportant. I don’t like that
feeling. “Hi Linda” on the other hand, instantly gives me the feeling of calm, personal and friendly, definitely my preference. The farewell is just as important. If you see a baby in the street in its push chair, and the little one smiles at you as you walk by, how do you respond? You can’t help but smile back, even if you are feeling stressed and grumpy, its human nature, and you will probably wear that smile for a few extra minutes as you continue on your journey. So how can you add a smile into your emails, your Tweets and your LinkedIn invitations? It doesn’t need to be a smiley picture, but maybe a word choice, language that would make the receiver smile, if only a little. Carnegie also talks a lot about the importance of being interested in the person he is talking to, but being genuinely interested in what they have to say. The one thing that we love to talk about is ourselves. It makes us feel important and at the same time it gives us a feeling of the warm and fuzzies. Most of us enjoy it, why wouldn’t we?
the commencement of your meeting or email, the person made a point of mentioning that it must be great to have such a collector’s item to ride in races? You would be proud I am sure and also quite taken a back and impressed that the subject has been brought up. You would probably go on to say how your cycle got you around Lake Taupo recently, and how you plan to tackle your next race…you could talk for hours if someone is listening. By the end of the meeting, you may not have even spoken about the real topic at hand, but have built a relationship instead. To move on from this point to a transaction, could now be only a matter of time if you have listened, encouraged and been genuine about it. Don’t just limit these principles to your emails and social
When you next compose an email to a colleague, client or prospect, remember to ask about something you know they have been doing, whether it is a personal activity or a business activity, but be genuine. The fact that you have remembered will go a long way. The final point I want to make is talking about the things your prospect is interested in, and by that I mean taking the time to do some research. Have a look what Google has to say about the person you are going to meet, see what LinkedIn and Twitter have to say, or Facebook. If you find that the person you will be meeting with later is a keen cyclist and rides a T Mobile branded cycle and a bit of further research tells you it is a collector’s item, you would know that that cycle is probably their pride and joy and has seen many race meets. So what can you say or do to bring the initial subject round to the great bike? How would you feel, if this cycle was your pride and joy, and at
media sites; use them with every point of contact that you make with a person, whether it is on the phone, or in a conversation with a real live flesh and blood person. I have highlighted only a couple of his principles, the ones I feel are the most important and easy to rectify. If Dale Carnegie were alive today, I bet he would be concerned at how we communicate electronically and our lack of regard for the receiver of the message but be completely in awe of how we can best use the tools such as Google and Facebook to our advantage to do a far better job. These are all very basic principles that we perhaps do in the real world, but not so much in our electronic world, and I urge you to try them out and see what response you get, I bet it would be a positive one.■
15 / JUNE 2011 / NZSM
RESOURCE CORNER
The Ultimate
Sales Machine:
Turbocharge Your Business with Relentless Focus on 12 Key Strategies Author: Chet Holmes Publisher: Portfolio $24.97 from Fishpond.co.nz
H
olmes has been named one of the top 20 change experts in the USA by "Industry Week." He helps clients blow away both the competition and their own expectations with one piece of advice: focus. The author shows the 12 key strategies organisations can use to improve sales, marketing, management and more. Brian Tracy describes Chet Holmes as ‘one of the greatest teachers of marketing, sales, and business success in the world today.’ ■
NZSM / JUNE 2011 / 16
NZSM
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